10 Things You Need To Know This Morning

Former
National Economic Council Chairman Larry Summers and former
Treasury Secretary Tim Geithner in December
2010.REUTERS/ Jim
Young

Good morning. Here's what you need to know.

Asian markets surged. Korea's KOSPI was up 0.96%; Hong Kong's
Hang Seng, 1.47%; and Thailand's SET, a whopping 2.84%. European
markets were all up, and U.S. futures were pointing higher.

Larry Summers, the man suspected to become the next Federal
Reserve chairman,
withdrew his name from the running last night. "I have
reluctantly concluded that any possible confirmation process
for me would be acrimonious and would not serve the interest of
the Federal Reserve, the Administration or, ultimately, the
interests of the nation's ongoing economic recovery," Summers
wrote to the president.

The dollar
immediately weakened on the news that Summers was out.
Emerging markets, on the other hand,
rallied. Market-watchers are pointing to the fact that
Summers was perceived as more hawkish —
meaning less likely to use monetary policy to juice the economy
—than his main rival and current
frontrunner Janet Yellen.

Many are now predicting (and for some, hoping) that Fed Vice
Chair Janet Yellen will win the nomination.
Writes our Josh Barro: "She's a key architect and proponent
of the Fed's appropriately accommodative monetary policies. Her
selection would reassure financial markets that easing would
continue as appropriate. And she doesn't have Summers' track
record of undermining his initiatives by unnecessarily
alienating people." Other names being floated are former
Fed Vice Chairmans Don Kohn and
Roger Ferguson. Former Treasury Secretary Tim Geithner has
held steady that
he does not want the job.

Inflation continues to be a problem in India, where
wholesale prices spiked 6.1% year-over-year in August, up
from 5.79% in July. Economists were expecting prices to
decelerate 5.7%. Onion prices, an inflation bellwether in
India, climbed an astonishing 51% between July and August.

Eurozone consumer price inflation
remained at 1.3% in August, holding steady from last month
and in line with economist expectations. The European Central
Bank has been targeting a rate just below 2%.

This morning at 9:15 A.M. we'll get U.S. industrial
production figures. Economists are expecting a 0.5% increase in
August after July's 0% print.

Later this week, the Federal Reserve will hold its two-day
FOMC meeting. Economists are expecting the Fed to "taper" its $85
billion a month purchasing plan of Treasury notes and
mortgage-backed bonds. On weaker economic news, many on Wall
Street are predicting a "taper
lite" – a reduction in bond purchases of $10 billion per
month, bringing the total monthly purchase down to $75 billion
(as opposed to the previous market consensus of $70 billion).

The U.S. housing market is
showing signs of cooling after a yearlong hot streak,
report the Wall Street Journal's Nick Timiraos and Conor
Dougherty. "Redfin, an online real-estate brokerage, said its
agents had multiple bids on 61% of its homes in August, down
from 76% in March," a trend demonstrating a moderation in
demand, they write.

On the precipice of possible American military
intervention, the U.S., Russia, and Syrian president Bashar
al-Assad have reached a deal regarding the state's chemical
weapons.
As Reuters' Dominic Evans reports, "By requiring Assad to surrender a chemical
weapons arsenal which until last week his government had barely
acknowledged, it would strip him of both a fearsome military
advantage over rebels at home and his most potent deterrent to
any further attacks by Syria's enemy Israel."